What Will Be Liberty’s NEXT Sirius Move?

Liberty Media (NASDAQ:LMCA) has taken physical possession of over 302 million shares of Sirius XM Radio (NASDAQ:SIRI) in addition to the 60 million shares it earlier bought in the open market. The latest move, despite having been expected for months, raises questions on what Liberty’s next steps in its attempts to take full control of Sirius would be.

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While Liberty’s earlier appeal to the Federal Communications Commission was denied in the face of vehement opposition from Sirius, it has made a second appeal to obtain de facto control. If it manages to do that, Liberty will convert almost half of its preferred shares into common shares within 20 days, giving it powerful voting rights. At the moment, Liberty’s “as converted” stake sits at 46.2 percent.

Media investment body Liberty had asked the FCC on May 31 to reconsider an earlier rejection of its initial request in March. Liberty said that it “has determined that it should assert control of Sirius and will take action to do so.”

However, Sirius responded by saying that said Liberty had provided no specific proposal on how or when it intended to take control. It added that its petition “offers nothing more than a refined menu of options” for how it may assume control. “Liberty Media’s inaction speaks louder than its words,” it said in its filing.

Liberty received preferred shares convertible to 40 percent of Sirius’ common stock as part of a financial rescue package it offered the satellite radio in 2009.

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